TaxTMI 
TaxTMI 
2026 (6) TMI 1110
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....nior Standing Counsel For the R4 in all the W.Ps. : Ms.Madhuri Donti Reddy For the R5 in all the W.Ps. : Mr.P.Giridharan For the R6 in all the W.Ps. : No Appearance For the R7 and R8 in all the W.Ps. : Mr.K.Govindarajan Deputy Solicitor General COMMON ORDER All these writ petitions are interconnected and, therefore, taken up together for disposal by this common order. A. The Case of M/s.Sripathi: 2. M/s.Sripathi Paper and Boards Pvt. Ltd. (hereinafter referred to as ''M/s.Sripathi''), a company incorporated under the Companies Act, is engaged in the manufacture of paper and paper boards. It imports waste paper in large quantities from various countries under the authorisation issued by the Tamil Nadu Pollution Control Board under the Hazardous and Other Wastes (Management and Transboundary Movement) Rules, 2016. 3. In the course of its business, M/s.Sripathi placed a purchase order dated 12.03.2022 with M/s.Gallops, Canada, having its office in Ontario, Canada, for the supply of Waste Paper - News & Pams. All relevant documents, including the Commercial Invoice, Packing List, Exporter's Statement of Origin dated 16.04.2022, and the Pre....
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....ss to re-export the goods and its acceptance of liability for penalty, the authority ordered confiscation of the goods. Relying on O.M.No.13-1/2004-HSMD dated 11.05.2019, which prohibits the import of waste paper consignments containing municipal solid waste, the authority directed that the consignment be re-exported to the exporting country at the importer's cost. A penalty was also imposed on the petitioner. 9. Thereafter, by letter dated 07.03.2024, M/s.Sripathi wrote to its supplier, M/s.Gallops, Canada, informing it that the Government of India had seized the goods and ordered their re-export, and seeking its consent to take back the consignment. In the said communication, M/s.Sripathi stated that it was aware of M/s.Gallops' commitment to environmental protection and believed that the dispatch of a consignment mixed with municipal and plastic waste was not intentional but had occurred due to oversight. It requested the supplier to accept the return of all five containers. 10. In reply, M/s.Gallops Waste Management Inc., by communication dated 11.03.2024, conveyed its consent to receive the goods back. On 05.04.2024, M/s.Sripathi and the person in charge accepted....
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....sion to re-export the consignment to Dubai, UAE. 16. However, in a communication dated 03.06.2024 addressed to the Commissioner of Customs, Tuticorin, M/s.Sripathi contended that the consignment could alternatively be disposed of by incineration or landfilling after obtaining permission from the Tamil Nadu Pollution Control Board. It further alleged that the adjudication order had been passed in violation of the applicable Rules and asserted that, in the absence of a waiver of container detention charges, it could not be compelled to bear the financial burden. It consequently threatened to abandon the consignment. Thereafter, the present writ petitions were filed. 17. W.P.(MD)No.24097 of 2024 has been filed challenging the Order-in- Original dated 28.02.2024 and seeking directions to permit the re-export of the goods to Dubai, UAE, or, in the alternative, to direct the Joint Commissioner of Customs, Tuticorin, to dispose of the goods within India through recycling in accordance with the applicable statutory framework. 18. W.P.(MD)No.24098 of 2024 has been filed seeking a Writ of Mandamus directing the Commissioner of Customs, the Joint Commissioner of Customs, and the Depu....
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....waste. Following a joint inspection, it was confirmed that the cargo contained plastic cans, beverage containers, plastic carry bags, and other municipal solid waste components, though no putrefiable organic matter was found. 25. The fifth respondent shipping liner has resisted the writ petitions, contending that the petitioner is not entitled to a waiver of rental and container detention charges. According to them, the cargo's detention resulted solely from the petitioner's misdeclaration and import of prohibited goods. It is, therefore, the petitioner's responsibility to re-export the hazardous cargo and bear all consequential rental and detention charges. 26. The shipping liner has also filed a memo stating that, as per the agreed contractual rates, the total detention charges payable by M/s.Sripathi amount to Rs. 14,01,95,605/-, while those payable by M/s.Rajarajeswari Krafts Pvt. Ltd. amounts to Rs. 28,19,09,255/-. It has, however, expressed its willingness to waive a total sum of Rs. 38,21,04,860/- and has agreed to accept a consolidated amount of Rs. 4,00,00,000/- towards detention charges from M/s.Sripathi and M/s.Rajarajeswari Krafts Pvt. Ltd. C. The c....
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....hem. 31. Upon consideration of the explanations submitted and the materials on record, the adjudicating authority concluded that the petitioner had knowingly arranged for the import of waste-paper consignments containing municipal solid waste, which were irrelevant to its manufacturing activities, with a view to deriving monetary benefit. It was further concluded that the consignments had been misdeclared and that, but for the intervention of the authorities, the modus operandi would have remained undetected. Consequently, by the Order-in- Original, the entire consignment valued at Rs. 48,59,118/- was ordered to be confiscated and re-exported to the port of origin. A penalty of Rs. 5,00,000/- was imposed on the Company, while lesser penalties were imposed on the individuals involved. 32. Thereafter, M/s.Rajarajeswari addressed a communication dated 04.07.2024 to the Commissioner of Customs, seeking appropriate directions to the custodians and the shipping liner for waiver of rental and detention charges. On the same date, the Company also addressed communications to M/s.Gallops, Canada; M/s. Exim Routes Inc., USA; and M/s. Exim Routes Pte. Ltd., Singapore, expressing apprecia....
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.... the petitioner to dispose of the goods. 38. W.P.(MD)No.24103 of 2024 has been filed seeking a Writ of Mandamus directing appropriate action against the ninth respondent, including suspension or revocation of its approval as an authorised carrier under Regulation 11 of the Sea Cargo Manifest and Transhipment Regulations, 2018. 39. W.P.(MD)No.24104 of 2024 has been filed seeking a direction to the first respondent to take appropriate action against the respondents 6 to 8, including suspension or revocation of the approvals granted to them as authorised Customs Cargo Service Providers under Regulation 12 of the Handling of Cargo in Customs Areas Regulations, 2009. D. The Respondents' case : 40. Thus, it can be seen that the case of M/s.Sripathi and M/s.Rajarajeswari are identical. Even the communications are verbatim similar. The respondents have filed their respective counter-affidavits. The stand taken by them is substantially on the same lines as that adopted in the case relating to M/s.Sripathi and, therefore, the same is not repeated. E. The Arguments: 41. Mr.Hari Radhakrishnan, learned counsel appearing for the petitioners, would submit that the consignmen....
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....ents, and the goods may be disposed of through cement kilns for coprocessing or utilised for energy generation in waste-to-energy plants, in accordance with the applicable guidelines. 46. The learned counsel also relied on the decisions of the Customs, Excise and Service Tax Appellate Tribunal, Kolkata, in Uniglobal Paper Pvt. Ltd. v. Commissioner of Customs (Port), Kolkata [2024 (18) Centax 438] and Krishna Tissue Pvt. Ltd. v. Commissioner of Customs (Port), Kolkata [2024 (19) Centax 199]. 47. The learned counsel further contended that the detention and demurrage waiver certificates issued by the Customs Department are legally binding on the shipping lines as well as the Container Freight Station operators, by virtue of Regulation 6(1)(l) of the HCCAR and Regulation 10(1) of the SCMTR. According to him, in the absence of any challenge to the said waiver certificates by the shipping lines or the Container Freight Station operators, they are bound to honour them and cannot insist on payment of detention, demurrage or storage charges contrary to the directions issued by the Customs authorities. 48. The learned counsel also drew the attention of this Court to Report No. 16 of....
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....n attempt was made to route the consignments to Dubai, the authorities in Dubai had also declined to accept the goods. In such circumstances, it is contended that permitting the reexport of the consignments to Dubai would neither be proper nor justified. 52. The learned Senior Standing Counsel would submit that the goods in question constitute prohibited goods and, therefore, neither their destruction nor their disposal within India can be permitted. According to him, the Office Memorandum relied upon by the petitioners has no application to the facts of the present case. As regards the waiver of demurrage, detention and related charges, it is fairly conceded that certain communications were initially issued by the Customs authorities. However, it is contended that the subsequent accumulation of charges is entirely attributable to the conduct of the petitioners, who failed to take timely steps to complete the re-export process. 53. The learned Senior Standing Counsel would further rely on the judgment of the Division Bench of this Court in M/s.K.Steamship Agencies Pvt. Ltd. v. M/s.Balaji Dekors (W.A. No.1017 of 2017 etc. batch, dated 04.07.2024). It is submitted that the Divi....
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....all be prepaid and borne by the petitioners in respect of the containers imported by them. According to the learned counsel, a detailed break-up of the charges payable for each container has also been furnished. It is therefore submitted that the shipping liner is willing to undertake the re-export of the cargo to the country of origin, subject to the petitioners accepting and complying with the aforesaid conditions. 57. The learned counsel, apart from relying on the judgment of the Division Bench of this Court in M/s.K.Steamship Agencies Pvt. Ltd. [cited supra], also relied on the Delhi High Court's decision in Muscles Fusion FZE v. Principal Commissioner of Customs (Import) [2017 (354) ELT 525 (Del.)], particularly paragraph 26. Reliance was also placed on the Delhi High Court's judgment in Global Impex and Others v. Manager, CELEBI [2019 SCC OnLine Del 11918], particularly paragraphs 169 and 170, to contend that the shipping line and cargo custodians are legally entitled to recover detention, demurrage and related charges from the importer, and that such liability cannot be avoided merely on account of the intervention of the Customs authorities. 58. The learned....
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....the adjudication orders to attain finality, the petitioners have approached this Court only in September 2024, after seeking permission to re-export the goods to Dubai and failing to secure the relief they sought. In such circumstances, a belated challenge to the Orders-in-Original cannot be countenanced. 64. Even otherwise, on a perusal of the records, this Court finds that the adjudicating authority had issued detailed show cause notices, afforded adequate opportunity to the petitioners, recorded statements of the concerned persons and considered all the materials available on record before arriving at the conclusion that the consignments had been misdeclared. The finding recorded is that the case involves deliberate misdeclaration and not a mere inadvertent error. Based on such findings, orders of confiscation, imposition of penalty and re-export of the consignments were passed. 65. This Court does not find any infirmity, procedural irregularity or jurisdictional error warranting interference with the said orders in exercise of its writ jurisdiction. Accordingly, the Orders-in-Original dated 28.02.2024 and 26.06.2024 are held to be valid, and the challenge thereto stands r....
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..... 70. There is yet another reason why the contention advanced by the petitioners cannot be accepted. The Hazardous and Other Wastes (Management and Transboundary Movement) Rules, 2016, have been framed in furtherance of India's international obligations arising under the Basel Convention on the Control of Transboundary Movements of Hazardous Wastes and Their Disposal (effective from 05.05.1992). The provisions of the Rules, therefore, have to be interpreted in a manner consistent with the objectives and obligations embodied in the Convention. 71. It is not in dispute that India, Canada, the United States of America and the United Arab Emirates are all parties to, or are governed by, the international framework regulating transboundary movement of hazardous and other wastes. The fundamental object of the Convention is to prevent the unlawful movement of hazardous waste and to ensure that responsibility for such waste remains with the exporter and the State of export. Permitting a consignment found to contain municipal solid waste to be diverted to a third country merely because it may be economically advantageous to the importer would run contrary to the spirit and object ....
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....g the environmental and social costs associated with such waste. Such practices not only undermine environmental justice but also pose a serious threat to the ecological security and public health of the receiving countries. Above all, it is a direct affront on the very sovereignty of the country and as such rightly terms as 'colonialism'. 76. The adverse consequences of such activities were noticed by a Division Bench of this Court in ITC Ltd. v. Norasia Container Lines Ltd. (W.A.(MD)No.721 of 2007 and W.P.(MD)Nos.5989 and 5994 of 2008, decided on 21.11.2008). The observations made therein continue to hold relevance in the present context. It would therefore be apposite to extract Paragraph 40 of the said judgment, which reads as follows: ''40. It is really painful rather pathetic to note that the foreign developed countries are searching for dumping yards to dump their municipal waste and are dumping their municipal waste somehow or other in the waters or soil of developing countries and thus are trying to enjoy a pollution free surroundings in their countries. In the case on hand, the appellant, instead of trying to secure the pollution free environme....
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....idered view that the petitioners' request to re-export the consignments to Dubai is legally untenable and cannot be countenanced. One illegality cannot be rectified by facilitating another. Accordingly, the prayer seeking permission to re-export the consignments to Dubai stands rejected. H. Issue No.3 - Disposal of Waste within India: 80. The next question that arises for consideration is whether the petitioners are entitled to seek permission for disposal of the goods within India. 81. At the outset, this Court finds the said prayer wholly misconceived. The regulatory framework governing transboundary movement of hazardous and other wastes has been devised precisely to prevent India from becoming a destination for the disposal of waste generated elsewhere. The petitioners, in effect, seek permission to retain within India consignments found to contain municipal solid waste and thereafter channel them for disposal through cement kilns, waste-to-energy facilities, or other authorised agencies. Such a course would be fundamentally inconsistent with the object and purpose of the statutory scheme banning the import of waste materials. 82. In this regard, reliance has....
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....innocuously. 85. Accordingly, this Court holds that the prayer seeking permission to dispose of the consignments within India is contrary to the applicable statutory provisions, inconsistent with the objectives of the Basel Convention and opposed to the public policy. The said prayer is therefore rejected. I. Issue No.4: Charges payable to Container Freight Stations: 86. The next issue concerns the prayer made against the sixth respondent, namely, M/s.A.L.S.Terminal Private Ltd., in W.P.(MD)Nos.24097 to 24099 of 2024, and the respondents 6 to 8 in W.P.(MD)Nos.24101 to 24104 of 2024, namely, M/s.A.S.Shipping Agencies Private Ltd., M/s.Sical Multimodal Rail Transport Ltd., and M/s.Prompt Terminals Private Ltd., which are the Container Freight Stations where the containers are detained, seeking waiver of detention charges/demurrage. 87. In this regard, it must be noted that the issue is no longer res integra. The same was considered by the Hon'ble Division Bench of this Court in K.Streamship Agencies Pvt. Ltd. [cited supra], and it is necessary to extract Paragraphs 45(3), 45(5), and 45(6). ''45. On the basis of the above discussion and findings arrive....
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....is whether the liner, namely, M/s.Maersk Line India Pvt. Ltd., arrayed as the fifth respondent in W.P.(MD)Nos.24097 to 24099 of 2024 and as the ninth respondent in W.P.(MD)Nos.24101 to 24104 of 2024, is liable to waive the rental and detention charges relating to the containers. 90. In this regard, as stated supra, the law laid down in K.Streamship Agencies Pvt. Ltd. [cited supra] would equally apply to the case of the liner, and it is only the petitioners who are liable to bear such charges. It must be noted that, apart from the Division Bench of this Court, other High Courts, including the Delhi High Court, have consistently reiterated the same position in Trip Communication Pvt. Ltd. v. Union of India [2014 (302) ELT 321 (Del.)], Muscles Fusion FZE [cited supra], and Global Impex and Others [cited supra]. 91. However, although the liner was not required to challenge the order directing it to grant a waiver, since such a waiver stands declared invalid, the peculiar and extraordinary circumstances prevailing in the present case deserve consideration. Upon the insistence of this Court, the liner has filed a Memo stating that it is willing to waive a substantial portion of the....
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.... nations not only violates international treaty obligations but also results in serious environmental degradation. Such practices impose disproportionate environmental burdens upon developing countries and undermine the principles underlying international environmental governance. 96. The business model adopted by the petitioners in the present case also raises serious concerns. It is undisputed that India generates a substantial amount of solid waste every day, reportedly exceeding 1,70,000 tonnes. Further, waste paper is abundantly available within the country. By way of illustration, calculated at the prevailing exchange rate during the year 2022 when the imports were made, the waste paper imported by M/s.Sripathi worked out to approximately Rs. 20/- per kilogram. Therefore, the very rationale for importing the consignments in question becomes questionable. 97. The Orders-in-Original, while adjudicating the matter, have recorded findings that the imports were made with the intention of securing illegal clearance of the goods for unlawful gain. Be that as it may, once the adjudication had concluded and the law mandated re-export within a period of 90 days, the petitioners w....
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....Nyaya Sanhita, 2023. The same is extracted hereunder for ready reference: ''152. Acts endangering sovereignty, unity and integrity of India. Whoever, purposely or knowingly, by words, either spoken or written, or by signs, or by visible representation, or by electronic communication or by use of financial means, or otherwise, excites or attempts to excite, secession or armed rebellion or subversive activities, or encourages feelings of separatist activities or endangers sovereignty or unity and integrity of India; or indulges in or commits any such act shall be punished with imprisonment for life or with imprisonment which may extend to seven years, and shall also be liable to fine. Explanation: Comments expressing disapprobation of the measures, or administrative or other action of the Government with a view to obtain their alteration by lawful means without exciting or attempting to excite the activities referred to in this section do not constitute an offence under this section''. (Emphasis supplied) 102. Thus, a careful reading of Section 152 of the Bharatiya Nyaya Sanhita, 2023, shows that these dastardly acts amount to an offence.....
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....xisting Office Memorandum, to the respective ports of origin. 105. Having regard to India's international treaty obligations, instances involving exporters from foreign jurisdictions who repeatedly indulge in such practices must also be taken up through appropriate diplomatic channels. The issue may be raised during bilateral engagements through the concerned Embassies and appropriate authorities of the exporting countries, with a request that action be taken against such exporters in accordance with their domestic laws. Wherever the existing international mechanisms permit, such issues shall be promptly flagged through diplomatic channels immediately upon detection of the offending consignments, so that effective remedial measures can be undertaken. 106. Further, it was argued, by placing reliance on certain Research Articles (Article published in the Quarterly Journal of Indian Pulp and Paper Technical Association [Vol.35, E3, 2023, P.88-94]), that even though a huge amount of solid waste is generated, not all waste paper is segregated and made available to the industries that need waste paper as raw materials for their products, which only leads towards the policy of i....